Selective Recall: Former Fed Governor Randy Kroszner On CNBC This Morning

Former Fed governor Randy Kroszner appeared on CNBC this morning, fully displaying a case of extremely selective memory regarding monetary policy and the Great Depression.

When co-anchor and token conservative Joe Kernen asked Kroszner  if it wasn't possible tit was time to just let the economy recover on its own, Krosznerhat  immediately channeled the ghost of the Great Depression, claiming 'they tried that in the 1930s and look what you got.'

Evidently, Kroszner's only knowledge of history comes from Friedman and Kagan's A Monetary History of the United States.

Never mind the tax hikes, regulatory assault on business, a plethora of government agencies designed to compete with business (e.g., TVA), and the Smoot-Hawley Tariff. In Kroszner's world, simply noting the admitted mistake of excessive tightening and employment of the 'real bills' doctrine choked US money supply during the Depression, so its opposite must be employed now, e.g., excessive monetary easing.

I guess when you've been a member of the Fed, it's impossible for you to see it as a warped, possibly-unconstitutional, grossly imperfect and usually badly-run central bank. Kroszner clearly has no ability to even entertain the thought that, as Alan Reynolds' research has shown, a little over a year ago in the Wall Street Journal, that the Fed's interventions in periods of economic softness have deepened and lengthened US recessions.

When challenged, Kroszner solemnly intones or implies that now-familiar argument so often used by the current administration in defense of its wasted, nearly-pointless fiscal stimulus programs,

'Ah, but it would have been so much worse without Fed intervention.'

By appearing on CNBC with the grandeur of a monetary wizard, and the deference of the co-anchors, Kroszner delivers a sense of certainty and absolutism in defense of any Fed intervention, no matter how massive nor disruptive of naturally-clearing and healing financial markets. And no matter that actual evidence of Kroszner's contentions is non-existent.